Pity students due to begin university this term. Not only have they had to fight off stiff competition for a place, with a 10% increase in the number of applications received by Ucas this year, but some are also facing a battle to find out how they are going to pay for it.

The increased volume of applicants, combined with changes in the way student grants and loans are administered, has put extra pressure on the student finance system, and many students will not find out what support they will receive until the last minute. While Student Finance England, the new body responsible for administering financial support in England, assures students who have applied by the deadline that they will be paid on time, many face a nail-biting wait to find out how much they will receive and some fear having to start their course without having their full funding package in place.

"We are expecting a lot of people to turn up at the end of September without knowing how they are going to pay their tuition fees or whether they are going to have any money to live on," says Lisa Daniels, senior student adviser at the University of the Arts in London. "That is what we are planning for internally."

Sara Anderson, who works as an information officer for a university college, and has been supporting her partner's application for funding to study forensic and investigative studies as a mature student at Coventry University, says they started the process in April but have still received no confirmation of whether the application has been approved. Her partner, Natalia Yan, had to send her passport details twice, while Anderson has had to send her signature twice, and was told to send it to the local authority, even though local authorities are no longer responsible for administering funds for new students. Yan has now written to her MP expressing her concern that "assessment teams are either incompetent or overstretched".

The issue has sparked lively debate on website thestudentroom.co.uk, where students have been complaining about applications and supporting documents being lost, difficulties getting through to the phonelines, and being left for weeks before finding out whether their application has been approved or even received.

"After waiting like half an hour to speak to an adviser at student finance, I got told it was taking them six weeks just to open letters," writes stellatommo20. "The bloke on the phone said they had a higher number of applicants this year than previous years – THAT IS NOT AN EXCUSE. Seriously pissed off right now."

"I'm really angry!" writes Ilovechilli. "I sent in my application in April and rang them last week and they said they've lost it! Or they haven't received anything! So I had to send another last week and I'm over a month past the deadline."

Julia Manley, senior student money adviser at Anglia Ruskin University's Cambridge campus, says her experience backs up these criticisms. "I had a student yesterday who had spent two hours getting through and then didn't because the credit on their mobile ran out," she says.

Worst hit are those most in need of the help, because means-tested applications take longer to process, says Manley. She says universities such as hers, with a high proportion of non-traditional students, are particularly concerned. "Many of our students are over 30," she says. "They have dependants and mortgages."

Daniels says universities that accept large numbers of applicants through clearing are expecting problems because those students are still finalising their funding applications.

However, Lynne Condell, chair of the Association of Student Money Advisers, says that while there have been plenty of anecdotal reports from members about greater difficulties and a reported backlog this year, the statistics show the number of applications approved is actually up compared with the same time last year.

"My message would be don't panic," she says. "Looking at the overall picture I don't think it's as bad as people are making out."

She says all students who have applied in time (by the end of May for existing students, and the end of June for new students) should receive some money. If they are concerned that it is not the right amount they should talk to their institution's student money adviser – it can still be adjusted once they have started their course. Even those who are applying now should be able to get help from their university until their funding package comes through.

This year is the first time that all new students in England have had to apply for financial help through a single body, rather than through their local authorities. Under the new system, students can create an online student finance account and apply earlier than in previous years. They can manage their account online and use a student finance calculator for a quick guide to the amount of money they can expect and the kinds of bursaries that might be available. While existing students continue to have their finance packages processed through local authorities this year, the plan is for Student Finance England to assess and distribute all student finance packages by 2011.

Originally, the new service was to be ready last September, with students expected to apply for finance as soon as they submitted their Ucas forms, but it only became available in February.

Student money and welfare advisers suggest the fact that it started late may be one reason why the service is stretched.

Condell says that there also appears to have been a problem reconciling paper and online information. And she says many money advisers miss the personal links with local authorities that had often been established over several years.

"We have built up a lot of good links with local student finance teams," she says. "Before, I could ring Liverpool local authority and say I have a student with a problem and they could have the paperwork there. Now it's getting through to a call centre."

But she says aspects of the new system are working well. For example, rather than having to send in a passport, students can now simply give the passport number for residency requirements to be checked. Also, standard loan payments can be made to students who have applied for means-tested benefits, even if the exact amount is still being worked out, so these students should receive some money by the start of term.

Wes Streeting, president of the National Union of Students, says: "The last thing that applicants need right now are delays in receiving their student loans. Student Finance England needs to be open about any problems, so that students who are likely to have the first instalments of their loans delayed can make alternative arrangements. Universities also need to be given time to prepare to give out temporary loans to tide students over."

A spokesperson for the Student Loans Company, which runs Student Finance England, says the average time for a finance application to be processed is six weeks. "We would like to reassure customers that anyone who has sent in their applications on time will be paid on time for the beginning of the academic year," she says.